The article in Feedstuffs Magazine  mentions Senator Grassley.


January 21, 2002

-- A Senate farm bill amendment that would ban packer
ownership of livestock the last 14 days prior to slaughter has everybody

worried.

Many independent livestock producers and free-market proponents, as well
as
small-farm advocates, worry that the proposed ban is too good to be
true.
After its initial victory in the Senate, they fear it somehow will be
dropped during final deliberations -- even though it passed 52-47 during

previous floor debate.

Members of the powerful, Washington-based American Meat Institute (AMI),
the
trade association for major packers, worry that the proposal would
disrupt
supply chains by making risk management and production contracts for
livestock illegal. AMI lobbyists are hard at work trying to block the
ban.

Meanwhile, in a policy shift, the American Farm Bureau Federation (AFBF)

has, for the first time, endorsed the ban on packer ownership. The
first-ever backing from the nation's largest farm organization may be
crucial on the issue.

Sen. Chuck Grassley (R., Iowa), the only Republican co-sponsor of the
amendment banning packer ownership, pointed out that the AFBF
endorsement
will mean its seasoned lobbyist will work to pass the ban during the
balance
of the farm bill debate.

Grassley emphasized during a conference call last week that while the
amendment would prohibit packer ownership of livestock, it "would not
preclude forward contracting." Nor, would it preclude cooperative
efforts on
the part of farmers to own livestock and control slaughter, he told
reporters.

However, Grassley said, "there is nothing more important to the
independent
livestock producer than to eliminate packer ownership of livestock. If
we
don't get it done now and we have a 10-year farm bill, in 10 years, we
may
not have any independent producers."

Grassley pointed out that even though the amendment was adopted on a
52-47
vote, AMI "is trying to get a couple of Senators to change their minds
and
strike it out." In fact, Sen. Larry Craig (R., Ida.), who initially
voted
for the amendment, is said to be considering a new amendment that would
strike it.

Nobody questions that the issue will be key to the business structure of

modern livestock operations as well as the meat processing industry, but

meatpackers, who have pushed for consistent products to add value and
meet
consumer demands, say the amendment would be "a return to the commodity
beef
and pork business."

AMI believes, despite assurances to the contrary by the amendment's
co-sponsors, "virtually all risk management and production contracts for

livestock could be made illegal," according to a briefing paper on the
proposed ban.

"The key authors of the amendment, Sens. Tim Johnson (D., S.D.) and
Grassley, have stated it is not their intent to stop producers from
being
able to obtain risk management or production contracts," according to
the
AMI statement.

"But the (U.S. Department of Agriculture) Packers & Stockyards
Administration has for years defined 'control' to mean any livestock
'obligated' more than 14 days prior to slaughter. This quite clearly
includes livestock that are under contract or under any sort of
marketing
agreements, including pricing grids."

Several effects of the amendment are disputed between the bill's
co-sponsors
and AMI -- raising interesting questions about potential unintended
consequences or costly court challenges.

In other challenges to the amendment, AMI alleged that:

* It would "make it illegal for a packer to establish joint ventures
with
producers if the producers commit their livestock to the operation."

* It would "kill packer/producer alliances and harm high-value, branded
programs."

* It would obstruct specialty products such as organic, antibiotic-free
or
free-range meats that rely on producer participation in specific
programs.

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